True North REIT (TSX: TNT.un) – down 50% from 0.049/month to 0.02475/month
Slate Office REIT (TSX: SOT.un) – down 70% from 0.0333/month to 0.01/month
Just last Friday – Northwest Healthcare REIT (TSX: NWH.un) – down 55% from 0.80/year to 0.36/year
There’s a few more on the chopping block. I won’t name them here.
The underlying cause is pretty simple – they are unable to raise rents at the rate their interest expenses are rising. Because they typically run at high leverage rates, they are forced to pare back distributions.
Much of the damage is usually done by the point they announce the cut, but because some investors are solely obsessed about distributions and dividends, they will be receiving a nasty capital shock upon such announcements.
Notably, Primaris (PMZ.UN) is not one of them. The decision to create a debt-lite balance sheet at the launch of this unit trust is looking prescient.
For a completely dead sector in need of serious capital injection (enclosed shopping malls) they are indeed doing very well, and indeed their conservative financial metrics will allow them to survive, or at least not zero out their unitholders.
“For a completely dead sector in need of serious capital injection (enclosed shopping malls)”
Enclosed malls are not dead, at least the type owned by Primaris (hub locations in secondary centres). Not only are these malls preserving and growing their occupany, rents are going up and they sit in the sweet spot for hosting high-density residential infill due to location and proximity to desirable services like transportation.
That’s exactly what I mean – the pure enclosed shopping mall concept is dead, the capital injection required is to transform it into a mix-zoned residential and commercial district – they’re popping up everywhere. In the US, at least in a driving proximity to where I am, I notice the medium sized towns’ enclosed shopping malls are all dead. Example: https://www.google.ca/maps/@48.4633281,-122.3374749,3a,75y,251.63h,89.93t/data=!3m6!1e1!3m4!1sWFtsan3S2fOdn5DlxIsdXg!2e0!7i13312!8i6656!5m1!1e1?entry=ttu